CAIRO (Reuters) – Egypt yesterday ordered former energy minister Sameh Fahmy and six other officials to stand trial on charges related to a natural gas deal with Israel, the public prosecutor said.
The decision is part of a crackdown on graft during the 30-year rule of deposed President Hosni Mubarak by the government appointed by the military generals who now rule Egypt.
A statement from the prosecutor said the officials, who were ordered detained earlier this week, would be tried at a criminal court in Cairo at a date to be decided later.
It said they were charged with “committing the crimes of harming the country’s interests, squandering public funds and enabling others to make financial profits through selling and exporting Egyptian gas to the state of Israel at a low price below international market rates at the time of the contract.”
The statement said the deal in question caused Egypt losses worth more than $714 million and enabled a local businessman, also indicted in the same case but at large, to make financial profits.
Israel gets 40 per cent of its natural gas from Egypt under an arrangement put in place after a 1979 peace deal.
Opposition groups have long complained gas was being sold at preferential prices and East Mediterranean Gas (EMG), the company which supplies it, violated bureaucratic regulations.
An official at Merhav, an Israeli firm that is a partner in EMG, had denied any wrongdoing.
The military-backed interim government is under pressure to kick start an economy that was hit hard by the popular uprising that swept Mubarak from power.
Egypt’s new government has said it would review natural gas contracts with other states, including Israel and Jordan, which could boost the government’s income by $3-4 billion.
Newly appointed Petroleum Minister Abdullah Ghorab said last month Egypt was trying to amend gas export deals with a number of countries, particularly Israel.
He said public disapproval of the gas exports was sufficient reason to negotiate better terms. Previous governments had insisted the natural gas deals were fair.
Egypt is a modest gas exporter, using pipelines to export to Israel, Jordan and other regional countries. It also exports liquefied natural gas via facilities on its Mediterranean coast.
